Oilsands Investments in Canada

Oil sands are one of the alternatives to crude oil, and large deposits of it are found in Canada - especially in Alberta. Given this alternative, an amazing potential for investment exists, as this is seen by many as the next 'big thing'.

Here, we outline the advantages and disadvantages to investing in oil sands.

Advantages of investing in oil sands

One of the main advantages to oil sands is that they are found in large amounts, almost equaling the oil reserves in the Middle East. This makes oil sands a viable alternative to crude oil welled in the Middle East. And since the deposits found in oil sands are of a significant amount, this makes oil sands one of the best alternatives to oil wells. Due to the large amount of oil and the large reserves that Canada has (numbering approximately 1.78 trillion barrels of oil), this makes investing on oil sands in Canada a very healthy prospect. Since the demand for oil does not have any signs of decreasing any time soon, investing in oil sands now will give immediate benefits and return of investment. And with ongoing research on harvesting oil from oil sands with lower costs, there is much to expect from oil sands.

Disadvantages of investing in oil sands

One of the main disadvantages of oil sands is that it’s expensive to harness compared to traditional oil wells. Since bitumen has to be extracted from the sand, it requires steam or some other technique to extract the bitumen. Steam requires a lot of power, thus, much expense also have to be spent just on extraction. Add to that the expense of distillation and conversion to gasoline and diesel, it would add up to a quite expensive process. Another disadvantage is that the viability of oil sands also depends on the price of crude oil. So long as the production of oil from oil sands does not exceed that of crude oil, oil sands would still be an attractive prospect. But once oil prices go down and bitumen extraction becomes more expensive, oil sands would bear more liabilities than profits.